Sterling Bank has secured approval in principle from the Central Bank of Nigeria to enable it restructure as a holdings company.
In a filing at the Nigerian Stock Exchange (NSE), Abubakar Suleiman, the chief executive officer of the bank said the bank’s desire to operate as a Holding Company was driven by its plan to spin off its Non-Interest Banking window which became operational in January 2014 into an autonomous entity.
According to him, Sterling Bank believes that the proposed structure incorporates efficiencies around operations and financing efforts that will support the individual businesses in reaching full potential.
He said this would be achieved through increased portfolio diversification as the proposed he holding company structure enables the non-interest bank and other non-core businesses to achieve greater results based on focused management of the distinct businesses.
In addition to this, he said the move would engender improved efficiency resulting from the consolidation of key functions such as compliance, risk management and other support functions, yielding improved prospects for individual business growth.
The bank also targets enhanced corporate governance which serves to promote a consistent culture across the group and quality of service to customers thereby facilitating sustainability of earnings.
In the filing, Sterling Bank said becoming a holding company would create better access to capital by leveraging the consolidated financial strength of the group which would have been otherwise difficult for each individual subsidiary company
According to Suleiman, “Going into the Holding Company structure, our desire is to entrench our business model premised on impact capitalism where we believe that private sector capital and market-based tools will offer the best types of solutions to Nigeria’s most pressing social and environmental challenges.
“The Holding Company gives us the structure to explore our business model further. The Holding Company is designed to operate on three major premises – Specialization, Partnership and Digitization.”
He said the conventional bank will focus on building skills and using technology to provide solutions in the areas that are critical to development in the country – Health, Education, Agriculture, Renewable Energy, Transportation (HEART)
The non-interest bank will focus on building partnerships that connect individuals and businesses leveraging technology to create business optimization while solving for an individual’s daily financial needs, he said.
“The overall business will focus on social impact, corporate responsibility and the highest ethical standards in its dealings.
“Our digitization drive will create an enabling environment for both financial institutions to grow while providing services and support to build efficiencies in different ecosystems.
“The execution of our plans is fully dependent on our interwoven operating model of Agility, Specialization and Digitization.
“Essentially, for us to be successful, we require people who are adaptable and knowledgeable running processes that are simple, quick and tech-led to ensure efficiency,” he further explained.
According to the filing, the bank is currently in the process of meeting the conditions for the final approval.